BACKGROUND. The purpose of this study was to examine the reliability and validity of the newly proposed axis V (disabilities) of ICD-10. METHOD. Eighty-six acutely ill men and women were prospectively recruited from the Al Ain psychiatric units, UAE. Both versions of ICD-10, the Clinical Descriptions and Diagnostic Guidelines and the Diagnostic Criteria for Research (DCR) were used for coding axis I psychiatric diagnosis and its grade of severity; the WHO Disability Assessment Schedule was used to assess disabilities. RESULTS. Inter-rater reliability of the DAS items ranged from moderate to good, and axis V ratings correctly predicted 84% of the observed classification on axis I. CONCLUSION. Axis V is a valid measure of disabilities, but is limited by its modest reliability.